Stephen Lee
Stephen Lee

The current malaise surrounding charity fundraising practice hit a new low with the report on the front page of the last edition of The Sunday Times about  a letter signed by 17 charity chief executives.

A casual reading of the article might promote a positive response – 17 representatives of large fundraising institutions arguing for more effective regulation of fundraising practice is surely a good thing, isn't it?

But a more reflective analysis of the content, purpose and execution of the letter reveals the magnificent incompetence that it actually represents. Let’s deal first with the content.

The article promotes the establishment of a new, independent regulator for charity fundraising, located within the Charity Commission. But the last place any sane person would want to locate any such regulator is within the Charity Commission.

The commission’s own commitment to and track record on the regulation of fundraising is poor, as witnessed by its failure to support implementation of the public charitable collections provisions of the Charities Acts 1993 and 2006.

More significantly, because most fundraising practice is rightly not deemed charitable, charity law (except for some basic – but important – general principles from trust law) does not really affect the majority of charity fundraising practice.

It follows, therefore, that the Charity Commission itself has (rightly) only limited powers over the conduct of large areas of fundraising practice. Extending the commission’s powers in this respect would not be appropriate, not least because regulators addressing other sector domains would be affected by such a move.

Nor would we want to limit the purview of the independent regulator to the fundraising actions of charities and charity trustees alone. Fundraising occurs in numerous different contexts outside the charity domain. Restricting the scope of regulation in such a manner would do little or nothing to address the core concerns of the public and those of proficient fundraisers.

Why, then, would 17 charity chief executives publicly make such a bold and  crass mistake as signing up to this nonsense? The answer lies in the nature and true purpose of the intervention.

Said to be coordinated by the Institute of Fundraising, publication of the letter was deliberately timed to land immediately before the evidence-gathering session of the Public Administration and Constitutional Affairs Select Committee on Tuesday 8 September. The IoF and the four charity chief executives, selected to attend the hearing because they had been directly associated with fundraising malpractice, were due to give evidence, along with the Fundraising Standards Board and the Public Fundraising Association.

Publication of the letter the weekend before what would clearly be an uncomfortable inquest for the chief executives and the IoF alike, was simply intended to divert attention away from the inadequacies and failings of specific larger charities in their immediate past fundraising practice, and from the poor performance of the IoF in representing the interests of all of its members in its maintenance of the Code of Fundraising Practice.

In short, publication of the letter supported by 17 large charities represented a coordinated, pre-emptive strike by the IoF against its partner in self-regulation, the FRSB.

It also served as an unwelcome distraction and public hindrance to the more considered and important work of the Etherington review of fundraising regulation. If I was Sir Stuart, I would be privately furious that such an ill-judged and incompetent proposal had ever seen the light of day, and that it did so just weeks before the publication of his report.

Ill-judged and incompetently handled it most certainly was, in both its execution and consequence. First, the letter signed by the 17 chief executives and alluded to in the Sunday Times article was not even actually published by the paper! Journalists preferred to publish a story focused on the ill-judged and non-representative comments of IoF chair Richard Taylor. Readers therefore remain unaware of the letter’s detailed content: you had to visit the IoF website to find it. This was not exactly a great public affairs win.

More importantly, at the start of the select committee session on fundraising self-regulation, briefed by the publication of the letter, the incoming chair of the FRSB, Andrew Hind, deftly and effectively stole the wind from the IoF's  sails, gaining first-mover advantage and placing the IoF on the defensive thereafter. Just watch it and see; it makes uncomfortable viewing for any member of the IoF.

Worse still, the IoF is now on the back foot, defending its own continued role as fundraising code initiator, which I and many other IoF members have previously supported.

While the charity chief executives might be left red-faced trying to understand how their fundraising and public affairs officials could be so readily duped into supporting an IoF proposal that simply cannot work, questions now need to be asked about the legitimacy and appropriateness of the role of the IoF leadership in this calamitous affair.

Why has the IoF aligned itself so strongly to the very organisations that have led us to this nadir of fundraising practice? What of the scores of thousands of other charities engaged in effective fundraising practice – were they consulted? And what, more importantly, of the voice of the individual professional fundraiser in all this – the constituency that the IoF ought to be representing? How were we consulted? Where is our voice being promoted?

For the record, we do need a strong, independent regulator spanning all facets of fundraising practice undertaken by charities and by other parties in the name of charity. The Charities Acts of 1992, 1993 and 2006 set an effective and workable precedent for the scope of such regulation.

The regulator needs statutory underpinning if its scope is to be properly universal and sanctions appropriately determined. The reserve powers in section 69 of the Charities Act 2006 already affords this opportunity; we do not need additional primary legislation to make it a reality. Thirty years ago, similar self-regulatory structures associated with the regulation of advertising were established to great effect – new powers and structures should be developed to govern fundraising activity.

Finally, the regulator must be adequately resourced if it is to promote nationwide awareness of its presence, manage a proactive investigatory service and deliver a just but rigorous disciplinary process. A 0.1 per cent levy on Gift Aid would deliver an effective budget similar to that enjoyed by the Advertising Standards Authority. It would be cost-neutral to the Treasury and, before the major charities claim foul in the name of capturing donor monies (as they did the last time it was proposed), let's reflect that this is not donors' money – it’s money that accrues as the product of a tax concession.

In any event, I’ll wager all of them that the increase in public trust and confidence that a properly resourced regulator would engender would attract additional net fundraising income for all charities that would far exceed the cost of the levy. 

Adoption of these measures would establish a regulator that was truly independent and whose sole purpose was the promotion of effective and appropriate fundraising practice. I wish the same could currently be said of the Institute of Fundraising.

There is no reason why these aims could not be achieved by a revised term of reference for the FRSB. It is a good brand that suffers simply through limitation of scope and lack of resources.

Stephen Lee was director of the Institute of Fundraising for 11 years and is now a lecturer in voluntary sector management at Cass Business School


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